Build a Change Order and Allowance Management System

A. Finished-Project Specification

Quantity: one potential-change record template, one change-order document template, one pending-change log, one approved-change log, one allowance register with owner selection form, one unit-price work log, and one directive-work log where the contract permits directed work, each reviewed by attorney and estimator, and each tested with at least one completed sample change.

B. Document Schedule (Component Schedule)

Document	Quantity	Format	Content Required	Preparation / Purpose
Potential-Change Record	1 template, 1 per change	Structured form	Unique identifier, date, source, location, description, evidence, initiating party, observation separated from conclusion	First-point documentation of any condition that may result in a change
Change-Order Document	1 template, 1 per approved change	Written document	Description, added/omitted scope, price and credit, net change, time effect, assumptions, exclusions, expiration, signatures	Customer-facing authorization document
Pending-Change Log	1	Register / spreadsheet	Status, value, exposure, owner, due date, impact for every unauthorized item	Tracks open exposure before approval
Approved-Change Log	1	Register / spreadsheet	Approved changes linked to contract sum, schedule, budget, purchase orders, subcontracts, invoices, drawings	Tracks authorized changes through closure
Allowance Register and Selection Form	1 register, 1 form per selection	Register plus form	Original allowance, selection, quote, tax, delivery, installation, markup, committed amount, forecast, variance, remaining balance	Tracks every allowance from budget to final cost
Unit-Price Work Log	1	Register	Measured quantity, unit, verification method, rate, authorization	Tracks work priced by verified unit quantity
Directive-Work Log	1 (where contract permits)	Register plus daily force-account form	Directed work performed before final price, with daily labor, material, equipment, subcontractor, and signatures	Supports pricing of work performed under written direction before agreement on final price

C. Information Takeoff

• Contract information: the approved Chapter 9 change, directive, emergency, allowance, and notice provisions, gathered before Step 1.
• Pricing information: the approved Chapter 7 pricing worksheet and current Book 24 cost data, used for every priced change and allowance in Section F.
• Professional input: attorney review of notice, directive, and authorization language; estimator or project-manager review of pricing method and approval thresholds.
• Sample project information: one active or representative sample project with at least one candidate owner-requested change and one candidate concealed-condition change, used to test the system in Section H.

D. Acceptance Standards

Check	Standard
Identification and evidence	Every potential change has a unique identifier, date, source, location, description, photographs where applicable, and observation recorded separately from any conclusion about entitlement
Pricing	Every priced change uses the Chapter 7 worksheet and current Book 24 cost data, with price and time effect stated separately
Authorization	No changed work proceeds before written authorization is obtained and logged, except under the specific approved emergency procedure
Allowance tracking	Every allowance is tracked from original amount through selection, commitment, installation, variance, and remaining balance; no unrelated selections are combined into one opaque allowance
Logs and updates	The pending-change log and approved-change log are current, and every approved change updates contract sum, schedule, budget, purchase orders, subcontracts, invoices, and drawings
Closure	No change is marked closed until field work, documentation, cost, schedule, billing, and customer approval are all reconciled
Professional review	Attorney and estimator or project-manager comments are recorded and addressed before the system is approved

E. Identification, Evidence, and Notice

1. Review the attorney-approved contract change, directive, emergency, allowance, and notice provisions. Record the specific contract section numbers on the potential-change record template header before drafting any procedure.
2. Create a potential-change record with unique identifier, date, source, location, description, and initiating party. Assign a sequential identifier scheme and record it on the template.
3. Define change sources such as owner request, concealed condition, design revision, code requirement, substitution, damage, delay, or scope transfer. List each source as a selectable field on the template.
4. Require photographs, field notes, document references, measurements, and responsible-party observations. Add a mandatory evidence-attachment field to the template.
5. Separate documentation of the condition from conclusions about fault or entitlement. Create two distinct fields on the template: "Observed Condition" and "Statements on Cause or Entitlement," each separately dated and attributed.
6. Identify whether work should stop, continue for safety, be protected, or await direction. Add a required decision field with these four options and a space for the responsible person's name.
7. Create a notice procedure that meets contract and jurisdictional requirements. Draft the notice timing, method, and recipient exactly as stated in the Chapter 9 contract; do not shorten or lengthen the notice period.
8. Create an RFI or clarification link where design information is required. Add a reference field connecting the potential-change record to any open request for information.

F. Pricing and Time Impact

1. Define original scope, proposed changed scope, omitted work, added work, and credit. Add these five fields to the change-order document template.
2. Perform quantity takeoff and pricing using Chapter 7 and Book 24 controls. Link the change-order template directly to the approved Chapter 7 pricing worksheet; do not create a separate, disconnected pricing method.
3. Include labor, material, equipment, subcontractor, supervision, protection, cleanup, delay, remobilization, tax, overhead, profit, and bond or insurance effects as approved. Confirm each cost category on the worksheet has a corresponding field on the change-order document.
4. State time effect separately from price. Create a distinct "Time Impact" field on the change-order document, stated in calendar or working days, separate from the price fields.
5. Identify schedule predecessor, procurement, inspection, access, and completion effects. Add a schedule-impact narrative field describing which specific schedule activities are affected.
6. Create a change-order document with description, amount, credit, net change, time, assumptions, exclusions, and expiration. Assemble the complete template with all required fields in a fixed order.

G. Authorization, Logs, and Directive Work

1. Create an approval matrix for customer, contractor, designer, lender, insurer, and other parties. List each party who must approve a change of a given type or dollar threshold, matching the Chapter 9 contract's authorization requirements.
2. Do not proceed based solely on an informal verbal request except under the approved emergency procedure. Add a required-authorization checkbox to the change-order document that must be completed before field work begins.
3. Create electronic and paper authorization controls. Define the accepted signature methods and the retention location for each.
4. Create a pending-change log with status, value, exposure, owner, due date, and impact. Build the log template with one row per potential or priced change not yet authorized.
5. Create an approved-change log linked to contract sum, schedule, budget, purchase orders, subcontracts, invoices, and drawings. Build the log template with columns linking each approved item to these six records.
6. Create a rejected, withdrawn, and no-cost-change status. Add these three statuses to both logs so a resolved item is never left showing as pending.
7. Create a unit-price work log with measured quantity, unit, verification, rate, and authorization. Build the log with a field confirming the measurement method used to verify quantity before payment.
8. Create a directive-work log where the contract permits directed work before final price. Confirm the Chapter 9 contract permits this method before building the log; if it does not, mark this log not applicable and record the reason.
9. Create a daily force-account record for labor, material, equipment, subcontractor, and signatures where applicable. Build a daily form requiring same-day signature from the customer's authorized representative.
10. Create a change-invoice and payment-status link. Add a field connecting each approved change to its corresponding invoice line and payment status in the Chapter 5 accounting system.

H. Allowances, Reconciliation, and System Testing

1. Create an allowance register with original allowance, selection, quote, tax, delivery, installation, markup, committed amount, forecast, variance, and remaining balance. Build the register with one row per allowance item, matching the allowances stated in the Chapter 9 contract.
2. Define what each allowance includes. Add a description field to each allowance row stating exactly what is and is not covered by the stated amount.
3. Do not combine multiple unrelated selections into one opaque allowance. Confirm each row represents one defined selection category; split any combined row that covers unrelated items.
4. Create owner selection forms with due date, approved product, price effect, lead time, and signature. Build the form and link it to the corresponding allowance-register row.
5. Create credit rules for unused allowance subject to approved contract language. State the credit calculation exactly as written in the Chapter 9 contract; do not invent a different treatment.
6. Create a procedure to update the customer, operations, accounting, procurement, and field team after approval. List the specific person or role notified in each department and the required notification method and timing.
7. Replace superseded scope and drawings in active use while preserving history. Define the version-control method that marks a superseded document while retaining the original in the project archive.
8. Review open changes at every project meeting and billing cycle. Add a standing agenda item to the Chapter 14 customer-communication calendar referencing the pending-change log.
9. Do not mark a change closed until field work, documentation, cost, schedule, billing, and customer approval are reconciled. Add a five-part closure checklist to the approved-change log requiring all five items before a change is marked closed.
10. Test the system with one owner-requested change and one concealed-condition change. Select one candidate of each type from the sample project identified in Section C and process each completely through identification, pricing, authorization, logging, and closure.
11. Review the system with attorney, estimator, project manager, accounting, and customer-service personnel. Record specific comments from each reviewer on the two test changes and the templates.
12. Approve the forms and logs and assign administration responsibility. Sign and date the approved system and name the person responsible for maintaining the logs going forward.